Your business is growing and heading in the right direction – but at the same time you have new responsibilities and risks.
Unfortunately, too often we see a lack of understanding and/or haste see employers get off on the wrong footing in hiring a new employee – inadvertently sowing the seeds for major problems sometimes even years down the track.
It’s important, as an employer, to fully appreciate, too, that your legal obligations start before the employee’s first day at work.
Taking on employees is more involved than many anticipate. However, documenting a robust process can help ensure you take an efficient, consistent and methodical approach each time, and that you’ve covered everything you need to legally.
Here are some considerations to get your checklist started:
- Prior to offering any applicant a role within your business, have you checked their references?
- Is the employee entitled to work in New Zealand? What is their immigration status?
- It’s a breach of the Employment Relations Act 2000 to take on any worker without a written employment agreement. Does the agreement include the minimum legal requirements of: name, description of work, place of work; agreed hours; salary or wages; dispute resolution process; public holiday entitlements; employment protection provisions; any other agreed matters, and the nature of the employment?
- Has the prospective employee received their employment agreement and had sufficient time to review the details? If there have been additional negotiations, are these reflected in the agreement?
- Is it the correct type of employment agreement? There are different aspects to consider for casual, fixed, permanent part-time and permanent full-time.
- Does the agreement include the clauses relevant to your business? For example, an appropriate non-solicitation clause or a legally-valid restraint of trade? For businesses in safety-sensitive industries, is there an appropriate drug and alcohol testing clause? For businesses under 20 employees, have you decided to include a 90-day trial period?
- Does the agreement include a clause integrating your company’s policies?
- Has the new employee signed their agreement prior to starting work? This is a must, and, if overlooked, can prove a costly oversight.
- Have they completed the tax, IRD and KiwiSaver documents?
- Does your payroll system correctly calculate and store the required details based on the employee’s particular type of employment? Are you able to provide the employee with a payslip for each pay period?
- Have you securely stored their signed agreement and other documents in both digital and hard copy?
- There is a raft of employment law changes that have either been recently introduced, or are on their way – including reinstatement of rest and meal breaks and prescribed support for employees who are victims of domestic violence. Are you across them, and are they properly reflected in all employment agreements?
This is by no means an exhaustive checklist – but a starting point, so you can draw up your own, tailored to your business’ particular circumstances.
If your employment agreements have been gathering dust and haven’t been recently updated, with all of the recent law changes, now is a good time to meet up with your business lawyer and update them. Your legal advisor can also help you put together a standard checklist to help make sure you can be confident all the legal boxes are ticked each time you take on a new team member.
Given the increasingly stiff penalties for breaches coming out of the Employment Relations Authority and the Employment Court, committing some time and energy to this, as well as seeking advice, really is a very small investment. It should also serve to save your business time around hiring, and provide that all-important peace of mind. The stark reality in employment law is that some mistakes, once made, cannot be undone.
For more information or any questions regarding the employer and employee relationship, you can reach me at john@aspiringlaw.co.nz or on 03 443 0900, or join Aspiring Law’s BizClub®